I encountered a policy which is a non-par product. It is not an ILP but has cash values. By right, everything is guaranteed including the early surrender penalty. Apparently, the early surrender penalty is not guaranteed. How the cash value is determined was not disclosed. It isn't link to any interest rate or whatever. The policy document says the insurer has the right to vary the surrender values by giving X months notice. This is my first time encountering such a policy. I find this to be unfair to the policyholder. The policyholder does not realized that this is not the industry practice. I feel sad for the policyholder. For this case, I doubt the adviser intended to take advantage of the client because all marketing brochure and training material did not show this fine print. I found out this problem when I read the policy wordings itself which is usually not available at the point of sale.
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